Here's what cracks me up about people excited about big tax refunds.

DandR

When I married DH, we ended up having to pay taxes every year, no more refunds.  And by paying, it was writing a 9K or 10K check to the govt.  it drove me crazy at first.  I would sit down and analyze everything...see how much was being taken from my check and going towards taxes...and then realize we had to pay another 9 K more!  HOLY CRAP!!!  You don't really realize how much in taxes you pay until you have to write out that check yourself.

I swear to god, the smartest thing the govt has ever done is require taxes come out of paychecks...because then people get all excited about their refund.  If it were the other way and everyone had to write a 20K check or whatever they end up paying total, there would be a revolt and people would be po'd at the govt.  But because people chose to have so much withheld and get a refund...woo hoo!  Awesome!  You "made" money!

But the reality is, have you looked at how many thousands of dollars the govt is keeping??  Oh, you get your refund (otherwise known as an interest free loan you let the govt have...another govt bonus)...and think "woo hoo...I made money!"  Well, that was money you earned to begin with.  It was YOUR money that you loaned interest free to the govt and you are all giddy to get it back?? 

Soooo, yeah, I'm po'd that we are getting about 5K back this year.  The first year we've ever had a refund....we have adjusted everything this year so that when we file next year, we better not get anything back.

I personally would rather write that check out for 5K than get a refund back.

But that's just me.

susan1017

AMEN!!!!!!

CleoKitty

That's not exactly accurate for everyone. Most of the people I personally know who are getting very large returns are getting it because of earned income tax credits, first time home buyer credits, etc. In that case they're not just giving their money to the gov't for an interest-free loan; they're getting back bonus money that they didn't have to pay into the system for in the first place.

hikerbeth

I totally agree.  I'd rather take that money with my paycheck, invest it myself and make it work for ME and pay a little at the end.

eta:  good point Cleo

Dimplz

There has never been any illusions in my mind about tax refunds.

I know it's our money that the government took too much of and is giving the excess back. I know it's not free or bonus money, but money that was earned by DH.

That said, it's good to see because it seems like it's easier to have the IRS to hold our $2500 than it it is for us to save it ourselves. However we know that 100% of that money came out of DH's check and if we changed our exemptions, we would get that money in his paychecks (and possibly owe if we cut it too close).

joseysbride

Like Cleo said, it would be awesome to get some money back due to special circumstance tax credits.  I would be THRILLED!  But to get a huge return every single year...I don't see the advantage of that.

Marce921

Here's why I'm happy about our tax refund. Yes, I realize that this money was mine that I essentially let the gov't have interest free for a year (I knew there before this post), but... if I were to get this money little by little throughout the year, it would end up getting spent on stupid stuff that we didn't need to buy. It wouldn't get saved or spent on what it really needs to be spent on (like big household projects). So, getting this big lump sum at the end of the year is nice for us, so we actually put it in savings or use it for what we want to be done to the house, etc.

femmegem

Dimplz:

There has never been any illusions in my mind about tax refunds.

I know it's our money that the government took too much of and is giving the excess back. I know it's not free or bonus money, but money that was earned by DH.

That said, it's good to see because it seems like it's easier to have the IRS to hold our $2500 than it it is for us to save it ourselves. However we know that 100% of that money came out of DH's check and if we changed our exemptions, we would get that money in his paychecks (and possibly owe if we cut it too close).

Ditto this. It's not like I think my refund is free money, but saving to pay out taxes is one thing I don't want to have to worry about, at least not right now.

Yodajo

ITA. 

Cleo made a good point, but in most cases, what you just wrote is totally true.

Mominator

CleoKitty:

That's not exactly accurate for everyone. Most of the people I personally know who are getting very large returns are getting it because of earned income tax credits, first time home buyer credits, etc. In that case they're not just giving their money to the gov't for an interest-free loan; they're getting back bonus money that they didn't have to pay into the system for in the first place.

This is definitely the case for me this year. Between losing my income when I became a SAHM and then H losing his job last year, our income was literally cut by 2/3 but because of EIC and things like our mortgage and student loan interest, we are getting back what little we actually paid in taxes last year and then some. Thankfully my H has a job again and I have a few job possibilities so this won't be the case next year.

gibs

Marce921:

Here's why I'm happy about our tax refund. Yes, I realize that this money was mine that I essentially let the gov't have interest free for a year (I knew there before this post), but... if I were to get this money little by little throughout the year, it would end up getting spent on stupid stuff that we didn't need to buy. It wouldn't get saved or spent on what it really needs to be spent on (like big household projects). So, getting this big lump sum at the end of the year is nice for us, so we actually put it in savings or use it for what we want to be done to the house, etc.

So, Marce, you just admitted that you can't manage your own money?  Nice. 

ans1999

Get over yourself.

KellyGreen

Your perspective is very logical, but there is a huge emotional component to money and spending and many people don't save / spend whatever they have, so getting a refund is exciting.

We are good savers (or try to be) and I still get excited about a refund.

Kapalua

ditto Marce-I get how it works...I just wish we were more saavy about money and investing, but we're not and then we'd end up in a panic during tax time.  We don't get a ginormous return, but it's a lot better than having to come up with thousands in April.  For us.

eta: no gibs, we're not spectacular money managers (when it comes to the big stuff) and yes I am admitting that.  

DandR

ans1999:

Get over yourself.

huh? ok

Marce921

I can manage to pay my bills, etc no problem, but I love shopping and would spend more than I needed of stuff I didn't need to buy, yes. My DH is the saver and he's much better at doing so. What we're using our tax refund for is finishing the basement... it's not something that NEEDS to be done, but something we want done. It we didn't get a tax refund, we'd still be able to do it, but it would take a lot longer than it will with our refund. It's just nice to not have to worry about saving that money on our own.

That said, we do have savings and regularly put money in it.

shouldbworkin

It doesn't really matter for me.  We get a ton back, but it's b/c of business losses.  I still pay a ton too.  I'd rather not have the business losses, but it is nice to recoup some of the $$ lost via taxes and there is no other way we could hold onto that money. 

ans1999

The whole post is why you are so much smarter/better than people who get back big refunds. Why not just let them enjoy themselves?

toadnfrog

Amen, sista!  This applies to many other places where taxes are applied...gas, for example! 

DevonPow

I made this same post on 24 months+ and got flamed. LOL - people don't like to hear things like this sometimes.

Temp108743750006959

this post makes me feel better about my $59 tax refund, so thanks!

eclaires

vccake:

this post makes me feel better about my $59 tax refund, so thanks!

That would be like a dream come true!  We usually come w/in $1-2k one way or the other, usually in getting it back.

We're getting $5k this year, and I'm annoyed.  I don't like giving the government any money, let alone giving them an interest free loan.

Yodajo

ans1999:

Get over yourself.

Ooh, she told you!  You're such a snob, DandR!

eclaires

ans1999:

The whole post is why you are so much smarter/better than people who get back big refunds. Why not just let them enjoy themselves?

No way!  It's one thing if people know this and still want the big refund.  It's another if they are ignorant - she's totally helping out those fools.  Why not thank DandR for this?!?!

Besides, regardless of whether people know or not, I do find it laughable when people are like, "OH YESSSSSSSSSSSSS I'M GETTING A HUGE REFUND!"  Like it wasn't their money in the first place (besides Cleo's points).

EMT

I agree with you but honestly most people are not capable of accurately estimating their tax liability (even if they have a simple tax return). Over withholding is generally better for the average person than under withholding because the reality is that people do not set aside the money needed to pay what they will owe in April (if they under withhold).

I'm a CPA and taxes are complicated.  I agree it is not 'found money' but it is surely better than getting a huge bill that was not anticipated.

Kapalua

Well, I'd hate if the assumption was that anyone who got a return was some buffoon who thinks they win the lottery every April. But I'm sure that wasn't the intent of the OP. Reality is that we don't make a fuckinglot of money compared to some people here (and relative to our cost of living)  and we're not financial wizzes. Like femme said-saving for taxes after everything else would just be more than we want to deal with right now.

ans1999

I think it is ignorant to assume people don't understand the way tax works. Everyone that has replied said they knew and didn't care. This wasn't a PSA, it was a look how dumb you people are post.

butterbeansmama

EMT:

I agree with you but honestly most people are not capable of accurately estimating their tax liability (even if they have a simple tax return). Over withholding is generally better for the average person than under withholding because the reality is that people do not set aside the money needed to pay what they will owe in April time (if they under withhold).

I'm a CPA and taxes are complicated.  I agree it is not 'found money' but it is surely better than getting a huge bill that was not anticipated.

Well said!

btw: LOVE your siggy pic and your caption...lol.

gracendantho26

Would anyone choose not to pay any money if given the option?

eclaires

ans1999:

I think it is ignorant to assume people don't understand the way tax works. Everyone that has replied said they knew and didn't care. This wasn't a PSA, it was a look how dumb you people are post.

LOL!  You're giving people FAR too much credit.  Maybe not people here, but I know plenty of people who are totally ignorant to how the tax system works and think they are getting free money.  And yes, I find it hilarious.

EMT

butterbeansmama:

btw: LOVE your siggy pic and your caption...lol.

Thanks!!

Also, I should add that I would not advocate that people purposely, significantly over withhold OR under withhold. There is actually a penalty for significantly under withholding. 

But I suppose if you cannot figure out your appropriate withholding (i.e. one that gets you a slight refund or has you paying slightly) OR you do not hire someone to plan for you, then getting a refund is better than paying (esp a significant amount).

beanzer

Very well said. ?Some people just do not get it!

GrowingFamily

I don't want to have to owe money, but to come out as close to even as possible at atx time is the goal.  I do not want to give the govn't a year-long, interest-free loan with OUR money, if I can help it!!

aprilmomtobe

I don't care if people know and choose to do it that way, etc. but it drives me nuts when IRL friends try to rub it in our faces when they get huge refunds. Like they are pulling a fast one on the government of something!

Andrewsgal

We are still in the process of figuring out our withholdings we are getting better but still way off. I am not happy with our 3k refund this year, but it is better than our 5K one last year. DH got a massive raise this year, so it takes some figuring out. That being said we would rather get a small refund then own a whole lot.

melmax

Well said, D&R, well said!

kertybird

When I first started my business and we were dirt poor I didn;t pay taxes in and got money back...now that was a great refund!  Not so much anymore!

jlw2505

Very well said - we always aim to get as close to zero either way and have done a decent job the last few years.

hopefulmom

We understand the whole system well enough.  When we both worked we both claimed 0 because we "preferred" getting some back at the end of the year instead of paying.  Usually, now, we have to always pay state and city and we get some back from Federal.  There is usually a tiny bit left over...and that is claiming ZERO!

sarahjared

I would rather get a few grand back then have to come up with that in April.

Yes, we save money but like pp said it is nice to get a lump sum back.  Otherwise we would spend it on unnecessary crap.

I was at no time under the illusion that i was getting 'extra' money.